[Anonymous]

Wiley Question –

Hi guys,

Do you know why the correct answer A, not C? Thank you!

An expansionary <List A> policy will have <List B> effect on net exports.

List A List B

a. Fiscal A negative

b. Fiscal no

c. Monetary A negative

d. Monetary no

[iPass]

You may think of it this way:

Expansionary fiscal policy (increase in government spending or decrease in taxes, or combination of both) will stimulate the economy. However, as a side effect, expansionary fiscal policy may affect interest rates, which can cause the dollar to appreciate. If the U.S. dollar is now more expensive, then our goods and services are now less attractive to other countries and the exports will decline. Therefore expansionary fiscal policy will have a negative effect on exports.

Expansionary monetary policy (open-market purchases of securities by FED, lowered reserve requirement, decreased federal funds interest rate) will expand the money supply and will cause interest rates to fall. This will cause the dollar to become less valuable and this lower exchange rate makes our goods and services cheaper and more attractive to other countries. Thus, exports will increase.

BEC - 10/12/2011 - 78
AUD - 11/23/2011 - 84
FAR - 02/22/2012 - 76 (I'll take it!)
REG - 08/31/2012

“Win as if you were used to it, lose as if you enjoyed it for a change.”
-Ralph Waldo Emerson

[Anonymous]

Thank you very much iPass. Your explanation is very clear. I appreciate for your help!

[iPass]

believe, no problem, I'm glad I was able to make it clear.

I was just wondering, don't Wiley have the explanation for right and wrong answers? I'm using Becker, and each question has a detailed explanation why one answer is correct and the other three are wrong. Or maybe Wiley's explanations are not clear enough? I was about to purchase Wiley as a supplemental material, and now you got me thinking :).

BEC - 10/12/2011 - 78
AUD - 11/23/2011 - 84
FAR - 02/22/2012 - 76 (I'll take it!)
REG - 08/31/2012

“Win as if you were used to it, lose as if you enjoyed it for a change.”
-Ralph Waldo Emerson

[Minimorty]

@iPass – The Wiley online bank is a good supplement to the Becker materials. Each of the questions provides a reasonable explanation of the correct answer (you just have to take the tests in study mode).

[iPass]

Thanks Minimorty! I will probably go for a printed version of Wiley book and work on those problems.

BEC - 10/12/2011 - 78
AUD - 11/23/2011 - 84
FAR - 02/22/2012 - 76 (I'll take it!)
REG - 08/31/2012

“Win as if you were used to it, lose as if you enjoyed it for a change.”
-Ralph Waldo Emerson

[kb24]

@ipass

The Wiley text and test bank are not the same. Both have lots of good problems with detailed answer explanations. There are a few of the same problems in both, but most are different. The text is cheaper, but the test bank is faster and can help you improve your speed at answering questions.

FAR 4/1/11 - 89
AUD 4/15/11 - 85
REG 4/29/11 - 80
BEC 5/13/11 - 85

[iPass]

kb24, thank you so much for your advice, I'll definitely take it into consideration. Honestly, I read your posts religiously and always find something useful for myself! Just wanted to say thank you for being here 🙂

BEC - 10/12/2011 - 78
AUD - 11/23/2011 - 84
FAR - 02/22/2012 - 76 (I'll take it!)
REG - 08/31/2012

“Win as if you were used to it, lose as if you enjoyed it for a change.”
-Ralph Waldo Emerson

[Anonymous]

iPass,

Sorry being late. I'm doing quarter end closing at work that didn't have time to visit here in past few days.

The answer for this question from Wiley is: “An increase in governmental spending causes an increase in domestic interest rates and international capital inflows. These capital inflows cause the domestic currency to appreciate, which has a negative effect on net exports.”

Above explanation didn't tell me why the other one is wrong.

However, for some of questions, they do explain to you in more detail way, I guess it really depends on the questions. I think in overall, Wiley still is a good practice tool.

[Author]

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